Tax Ballot Measure MA (Marijuana Tax)

What is Measure MA?Measure MA is a tax on medical and recreational marijuana. It sets a gross receipts tax for sales of both medical and recreational marijuana and establishes a tax on marijuana cultivation, processing, testing and distribution in the City.

How would the Measure MA Revenue be spent?Measure MA is a general tax to fund city services. Revenues from the tax would pay for general City services, such as public safety, 9-1-1 emergency response, police officers, regulation of the marijuana industry and homeless assistance programs.

How much money would Measure MA raise if both medical and recreational sales are allowed?Measure MA would raise approximately $13 million annually.

What are the other measures on the ballot related to marijuana?

Measure MA and Measure MM are two different ballot measures. Measure MM is an initiative ordinance placed on the ballot by citizen petition and specifies how medical marijuana businesses will be allowed to operate in Long Beach if approved by voters. Measure MM was placed on the ballot by the City Council after medical marijuana supporters gathered enough signatures to qualify the measure for the ballot. The other measure is Proposition 64, a Statewide ballot measure to legalize recreational marijuana in California.

What are the specific tax rates under Measure MA?

Medical Marijuana sales would be taxed at 6-8 percent of gross receipts, initially set at 6 percent.

Recreational Marijuana sales would be taxed at 8-12 percent of gross receipts, initially set at 8 percent.

Distributing, Processing, Transporting or Testing of Marijuana (when not performed by a business that also sells the final product to customers) would be taxed at 6-8 percent of gross receipts, initially set at 6 percent.

Cultivation of Marijuana would be taxed at $12-15 per square foot, initially set at $12.

Does Measure MA have different tax rates for Medical Marijuana and Recreational Marijuana?Yes, medical marijuana sales would be taxed at a lower rate than recreational marijuana sales.

Does Measure MA allow medical and recreational marijuana businesses in Long Beach?No. Measure MA only establishes the tax rate. Measure MM and Proposition 64 are the two measures on the November ballot that would allow medical and recreational marijuana businesses in Long Beach if supported by a majority of Long Beach voters.What exactly does Measure MA Tax?
Measure MA taxes all components of the
marijuana industry should Long Beach
voters choose to allow medical or
recreational marijuana in the City. The
gross receipts tax would be paid at the
time of sale for those purchasing at a
dispensary or in the case of a business
purchasing from another business. The
cultivation tax is paid by those growing
the product.

Who pays the Measure MA tax?
Only those purchasing marijuana at a
dispensary or marijuana businesses pay
this tax. General members of the
community who do not purchase,
cultivate, test or process marijuana will
not pay any additional taxes.

Do other jurisdictions tax marijuana?
Yes. Long Beach studied 16 other
California cities for their tax rates. Cities
across California tax this industry at
different rates, with rates up to 15 percent
of gross receipts. A study of those 16
other cities shows that Long Beach’s rates
would be at approximately the midpoint.

Why did the City Council put Measure MA on
the ballot?
The City Council received a report from
City staff demonstrating the City would
need significant financial resources to
properly regulate this industry.
Specifically, City staff estimate that
should Measure MM pass, it would be
necessary to spend approximately $12
million per year on medical marijuana
alone to cover the regulatory,
enforcement, health and public safety
costs. These estimates are based upon
the City’s prior experience addressing
both legal and illegal medical marijuana
businesses in Long Beach, as well as
experiences from states and other cities
that have allowed medical marijuana
businesses. Further, City staff have
reported that the marijuana tax rates in
Measure MM will not fully offset these costs. Due to these reasons, the City
Council placed this competing measure on
the ballot for voters to consider, which sets
higher rates than those in Measure MM.

What happens if Measure MA is not approved?
If voters approve Measure MM and not
Measure MA, the City’s marijuana tax
rates will be significantly lower than they
are currently or as set out in Measure MA:
Long Beach will have a 0 percent gross
receipts tax on recreational marijuana, a 6
percent maximum gross receipts tax on
medical marijuana dispensary sales, a 0
percent gross receipts tax on
manufacturing/processing, a 0 percent
gross receipts tax on testing sites, a 0
percent gross receipts tax on
transportation, a 0 percent gross receipts
tax on distribution, and a maximum $10
per square foot tax on cultivation. In lieu
of a gross receipts tax, marijuana
businesses only engaged in
manufacturing, processing, testing,
transportation or distribution will pay a
maximum $1,000 tax annually.

What happens if both Measure MA and MM are
approved?
If both measures are approved, medical
marijuana businesses will be allowed to
operate in the City of Long Beach, subject
to those regulations contained in Measure
MM. However, the City’s marijuana tax
rates will depend upon which of the two
Measures receives more votes. The
Measure receiving the highest number of
votes will set the tax rates.

What will happen next with the proposed tax?
Long Beach voters will decide on November
8, 2016 whether to establish the tax rates
under Measure MA, as well as whether to
allow medical marijuana sales through
Measure MM, and recreational marijuana
sales under Proposition 64. If Proposition
64 passes, the City Council would consider
under what circumstances recreational
marijuana would be allowed, if at all, in
Long Beach.